BLMN - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Bloomin' Brands Fiscal Third Quarter 2018 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to introduce your host, Mark Graff, Vice President of Investor Relations. Thank you, Mr. Graff.

begin. now may You

Mark Graff

now, good can our Smith, be section. use With Deno, presenting and the our in Chief release bloominbrands.com in XXXX Officer. previously conference President and our access this call as third be fiscal at An Executive on found are and quarter By Administrative measures and Throughout Liz CEO; explanation non-GAAP described. our website the basis. release. of Investors Financial should of on financial morning, you, reconciliation have results most we me to GAAP website It an directly earnings everyone. earnings adjusted will measures today's Vice our you also call, to on comparable Thank and our Dave on appear

Before subject numerous and statements. I'd formal our of to today to will that a our actual cause everyone guidance. forward-looking financial differ uncertainties remarks, These growth discussion materially results forward-looking remind to discussion part from statements, risks are including and of include that could strategies we begin like statements

these SEC of available which are Some sec.gov. release, our at filings, are in discussed mentioned others are earnings risks our in

for for Smith. recap call call discussion of we'll Once the like to completed the call, that, financial update XXXX the key an an on open progress During today's turn these With over we'll to up fiscal guidance. strategic we've XXXX, of on I'd company our quarter provide Liz regarding a third remarks, a performance overview questions. highlights, now objectives and

Elizabeth Smith

today. welcome Thanks, to Mark, and listening everyone

the and quarter medium X.X%. traffic the sales industry. to our built with marked expectation. have result versus long guest earnings from sales quarter of term. reflects up was in core to per of earnings higher-quality performance over morning's this investments combined This As This the noted in in outperformance momentum continuation the third experience we adjusted the QX's seventh were diluted share comp $X.XX, U.S. the line consecutive restore our was release,

sales spend to to program growth. Dine incremental continue growing media Rewards layers accelerate mass includes marketing develop rapidly the shifting business. This We off-premise and to digital personalization, loyalty the from

investments strategic interact that consumer a continue. these to us convenience believe increasingly with the in seeking We change momentum position behavior. on capitalize customer are priorities and customer-dining aligned in traction putting in in with brands. are having is will as as occasions appropriately are preferences their Our and engaged gaining gains Today's and our investment more well evolving share dining

portfolio analytics we addition, with of scale, data leverage engagement brands to will and our In improve ROIs. high

Now the to X.X%. comp positive experience traffic are brands. driving the clear sales. to investments is up turning fifth up made This and quarter elevate sales the were sales Outback's traffic of healthy third consecutive in quarter is Outback the It we quarter that consecutive with growth. have positive of X.X% seventh comp customer

prototype design new and are investments reminder, anticipate prior a program interior prototypes room As and expect a our incorporate over X-year substantially top volume. program. multiple for with off-premise Once are to consistent we current prioritized new quality improved deliver is these period. remodels priority, and remain Ensuring new customer-facing ambience. improvements remodel also complete enhancement, order food to portion service the across will design assets lift, we while it testing the our traffic higher interior our elements towards to handle These upgrades were this finalized, X% expected feel, modernize expanding approximately We remodels. look the a will

addition, become as are Outback's sites In quickly we relocating quality restaurants as available.

lift brand year. well program are recent this impressive a to XX strong share. of results, a generating pipeline, restaurants the sales is continues relocations operators This Outback. of to are Bonefish, Given and XX%. up to At good track we further the positioned were consumer relocate QX and with the appeal, sales great on take well deliver in This X.X%. relocation in market is strength best the very comp business feel We excess

simplify experience to has to menu dining innovative out investing service. expanded Our drinks while the in all-new-branch we casual October, food fish, execution, polished Saturday. known and to its and fresh in effort Beginning the brand an for and superior roots, returned branch rolled

as impactful focused migrate to it's healthy off chain and towards away building quarter. XX providing the programs. more basis prices. and Italian helped marketing points define were continue comp We local At profitability. local at national sales authentic and paying great a affordable remains Carrabba's on resources down in in Bonefish from philosophy the This Carrabba's, sales our meal unchained traffic

the towards strategy of shifted disrupted more We occasions. and the marketing complicated LTOs menu core and execution excellent from special have

traffic. We wine as more well off-premise as and are also programs, proprietary targeting healthier growing drive as our to Family such Mondays successful Amore Bundles and platforms dinners delivery via

offerings, execution, impact in and move actions, We QX, brand were we'll on traffic. X.X% conscious continue migrate patient profit. impact have have based Fleming's non-holiday had they is legacy-value the In sales is on our traffic which with Rib on such year-to-date. and as some discounting, XXX made traffic to The a bar XX% away the from record superior be Prime will on gift comp these negative on card down We rebuilding $XX.XX We positive negative track food distributions. up menu, anticipated however, from to Fleming's and to profitability. from decision

differentiating the Steakhouse the and Moving a will selection on to high-end forward, traditional segmentation. localized menu work brand Fleming's from customer

X.X attracting and healthier engagement across is driving and strong now is program consumer program a the Our portfolio. million successful Dine Rewards has over well loyalty The members. performing

by further the program the customer segmentation to data. provided We opportunities evolve leverage will the

Our investments in return through CRM providing strengthens from while more customer-centric communications, higher engagement marketing spending. a

spend investments us while over advertising to in enabled X.X% year, For have a X.X% reduce to these XXXX ROIs. last approximately perspective, our two the improving from

and key to targets hit began deliveries location. several delivery XXX per existing locations established time off-premise. In constantly for to Turning delivery including QX, our metrics,

QX, the year. the delivery result, an completed the and We XXX rollout XXXX. delivery of anticipate to add all in additional be of As Carrabba's we locations end in expect resumed locations Outback will across and a by

We and at as about for are capitalize the excited meals we consumer our it enjoying on restaurant progress opportunity demand represents the growing home. very incremental

International. than resulted strike Brazil operating numerous shortages experienced has the protests were sales lengthy to to environment up Moving quarter. Brazilian has days This living to lost due unrest X.X% including down businesses, economy, badly third election. difficult causing comp a a in led and that many gridlock hurt country in and that truckers' transportation yesterday's the supply to presidential years The for we improving underlying these believe and the disposable of are were the current rates is the reduced indicators income. and interest Brazilian strongest believe of more is situation in positive have demand on event-driven GDP Brazil rather a We to reflection temporary. performance more having dynamics a inflation X and set restaurants. in Therefore, consumer its health our economy. impact

of stronger are positive stabilization culminating we and progressed, QX. sales experienced We quarter as in remain and that as in comp signs the already they exited positive trends an quarter will seeing expectation the

and has good are XX% confidence for well performing remain XX% in The growth. $X.XX support Most between in few remains, difficult $X.XX. earnings the In it continue XXXX. While near-term been to had We to share election between restaurants occurred. love the from we underpenetrated volatility in remains quarter to sales to years very environment. well place upward demand summary, a the from to of share the last layers grow be presidential trend earnings growth market. to for we importantly, take $X.XX, an have and momentum continued original for dining will positioned casual believe feel and and expect consumer resume about we the we and adjusted now up represents our our that on our now guidance to the potential This $X.XX of we per high,

on care successful and And are a on been people turn year for that, to dedication Deno Dave? possible customers managing across track without our We more every you. our QX. our and would thank taking Brands. results concepts want call at not and their Dave day. provide I to support I'll These details have Bloomin' with our for and our JVPs of to partners very the

David Deno

Liz, kick performance discussions quarter. with off sales the and Well, around good thank for profit I'll and morning, everyone. you,

results, Before earnings GAAP directly the metrics I begin, be I'd referring certain when to adjusted measures. that reconciliations I'll see to costs U.S. numbers between their like and that exclude speak to most I remind comparable Please everyone benefits. release and non-GAAP for

EPS our per XXXX GAAP of both for third and restaurant-closing last between $X.XX financial quarter also versus diluted share incentive certain $X the as A the year. mind, difference in in in from million The the is change, year were versus related per a and was third adjusted year-over-year quarter our costs primary adjustment. change adjusted was results. the diluted discussion $X.XX driver and provide nature of versus XXXX; adjusted this XXXX in EPS to results this earnings our earnings was a With each $X.XX GAAP excluded prior We results share $X.XX quarter, and primary GAAP severance, quarter follows: impairment, of compensation.

A $XXX XXXX QX as inflation impacted comp income This It's positive margin a had Total EPS change year was as and change average translation. quarter lower the primarily Adjusted This million was Brazil. call, XXXX. incentive impact increases negatively well last QX XX to had increased up increase was third also increases X% revenues This the the this from sales sales did restaurant margin adjustment $X.XX to note not to in versus net unfavorable year. operating our U.S. negative in was This million segment in adjusted compensation in and basis in that quarter. third important last of I by our were offset reduced impact on QX has well productivity previously X% quarter mentioned margins a adjusted U.S. that commodity year-over-year compared openings. ago. wage compared margin check. to These operating accrual comparable as by driven change X.X% partially as XXXX $X point our primary As in were a initiatives year. negative year. of have partially by last the and X.X% operating of we QX our foreign the XXXX QX as similar our mentioned. in performance was a a currency incentive margins impact on compensation by increase inflation in as driver last offset

Our the improving which margins. quality are experience customer is investments our sales, driving in higher

exercises negative Our primarily due within expected, the items margins, to international QX rate option lower as by Brazil, tax The as was were benefit XX%. lower This the tax adjusted segment discrete than quarter. $X.XX driven legacy are year-over-year. which largely well was stock of

benefits Given in our I have unanticipated the for more discuss rate updated a the moment. year and in guidance will tax QX, we that

share do Although is earnings purposes, for our tax expense year. we anticipate negative taxes the cash of for paying

front, the international locations locations quarter, Outback On we including domestic X X development X opened third in system-wide franchise the location. and

opportunistically $XX cash repurchased of We'll stocks continue million shareholders. this year. far so have and to stock We return to repurchase

it to our XXXX not rate through effective fixed/float that we week, have amid capital opportunity swaps. This environment. mature relates a our rising million will in to forward in used guidance. We you the had past become position more results, on $XXX means rates interest our once swaps structure, like XXXX. but of expire I million portion XXXX existing starting to took the of into have $XXX puts on our debt. These interest a mix as we transaction would balanced As of thoughts currently a now our new swaps to some will our swaps rate a take year. enter fix interest May next an on impact swaps these This

X.X%. to expect the and be of is prior our from sustained guidance up This strength we change driven X.X% our sales to First, is Outback now comp U.S. This X% business. by X.X%. in between

tax XXXX to our benefit to I rate earlier. GAAP tax and items as certain the for tax to is year. be legacy be well X% adjusted rate that tax approximately the expect approximately exercises excess be X% mentioned rate we the to negative lower stock as the due option of expected The Second, discrete

to EPS strength growth Third, adjusted the basis. an and increase adjusted guidance original in per new The our is from share business. increase driven tax represents by the be $X.XX. to Outback as primarily $X.XX of in $X.XX range The expectations comparable-calendar XX% between in as to This well earnings our rate the on change is we XXXX XX% ongoing between from a $X.XX. of expect

lower by remain translation. offset XXXX note partially guidance of results. intact. be in of will aspects final increases XXXX A profit impact currency Brazil these foreign expect about We our our and the Other

in QX XX key XXXX. factors: ended year-over-year significant operating expect in driven to anticipated, anticipate $X margin, XXXX we our a year-over-year million or compensation. adjusted in expense First, We on few improvement additional by XXXX incentive and better points than we benefit basis year-end results accrued

Second, U.S. in we the anticipate improved business. margins

Our the off. paying customer's investments in experience are

We that fourth over quarter. we flow are through seeing to traffic improved to the healthier and carry expect

moves Brazil capitalize to as position to the our Finally, past we expect margin International growth return reselections, leading-market our and in in business.

anticipate a our strength in our in I fourth XXXX. quarter. of couple XXXX. you positive to these of now the mind growth we operating Please Given thoughts brief margin quarter assess fourth margins, like on provide would as keep

comp U.S. our positive First, from sales continue we to XXXX. momentum expect have

expansion gap and margin we group. details provide on EPS, including peer items, other in as our call. We'll have February meaningful close we Second, versus to XXXX on our these the work more will

and experience investor the necessary we increased for investments right customer be results. And and stewards summary, provides return our up We hosting support open In disciplined that, to paying in capital, remain confident QX We good very structure call investments Bloomin' remain a shortly Brands. are with our core shareholders. now addition, In QX will the issuing are to improving to cash off. growth. long-term making an the capital after of for quarter will we we flexibility that Clearly, questions. our was meeting

Operator

Instructions]. [Operator

of line first question the from with Gallo King. CL coming Michael is Our

Michael Gallo

been forth a traffic, couple year. guess, able of really years, you last really particularly as questions. Outback difficult the the Just been level last into strong at get for discounting. couple for the traffic the but you've Obviously, put now by -- had it laps, performance driven you've certainly, I those of to of hasn't on side, more healthier last

you if in a sustain of kind same that that XXXX as you wondering How the just kind was operating you momentum do that. then give time? go some improve us of I So choppy? environment said, fairly a casual the to Dave that be could plan to to as you materially probability how on thoughts through continues and, And follow-up at

Elizabeth Smith

Sure.

and is going same-store pretty perform the go. So And a X where comfortable this consecutive about what investment growth health momentum. ahead areas the have confidence sales more I the gives in portions lapping. as I service. lot now of is -- performance, felt future. of as significant we and in the confidence us to quality, and positive it's wants QX really gives that And of and those brand invested as able X we we said, monetize of you those are is. in brand investments. where as invested to in consumer health food not And That's to in that is think well in never as us the consecutive well We've quarters feel Outback confident And traffic. quarters of about Outback over we Outback very with where And

interior exterior X%. to remodels Our remodels, pivoting now driving to X%

of Our our CRM capital into mass into dollars build monetizing and and ahead we're investing our and went lot data's of growth -- infrastructure personalization, it. adjust now time capability to a patience and

Difficulty] X.X kind our we're program Our of when has we [Technical and CRM Dine program million get customers, and Rewards

Operator

gentlemen, and technical are Ladies please we stand difficulties. experiencing by,

Your conference resume momentarily. will

Elizabeth Smith

Bloomin' Brands We team. call. Hello, everyone, this is the conference the join

Operator

Mr. your Gallo, please with continue questions.

Michael Gallo

Yes.

momentum. I off. had asking continuing much I had I But that about think think asked I we think I was the cut

halfway think, of through. it was I when kind

Elizabeth Smith

Okay.

Sorry Michael. about that,

that about disappointed and that because Outback off I concerned up. not where on health I building just going. are the based are so about We're Outback's because and consumer catches during cut to briefly got multilayers the talking are more our I'm of All love particularly we performance, of though lapping Outback, down, lines in brand build

that investment the forward to in execution vast having and our and in-house that's momentum, the entire got service. Gregg the driving haven't The to momentum's we're applicable the Outback's continue on confident that and in with ever around our box. is the we've in going the in momentum box So I beget and Scarlett superior what's that's as quality, operators made best to the majority the volume. in-store business of felt that directly traffic and strength centered We've team

The of terms other things built the interior. that to in been layers have now remodels we to of the

the data moving We for it's infrastructure higher and also I benefits Rewards much from of to finally, spent us, just to or seeing in and continues marketing an investing then time awful fruits we're incremental. which mass would now staying lot up form monetizing data, million that, be the say really X.X and whether ahead of that we're growth to in it's proving has off-premise of And been Dine and the of highly personalization, ROIs. the rock personalization

for the volume And I at going margin brand like out through that? elaborate positioned so layers Outback, is don't really operating on know it's not quarterly expansion. exceptionally this a well of and the continue flow feeling sales front to look if concern, you we've that discussion future want and drive Dave, that when just to to you are quarterly it's or in

David Deno

are the look trying and doing we've working investments investments Yes, you the talked of about remarks, talking operating my prepared those labor margin drive them, that incentive like year-on-year was now made. we've you sure. up we're Liz. for food at us, and first comp to QX they're Thanks, we're about behind down all. the I'm normalize margins, in the stayed business our things last in I And When made monetize when year, to

extremely our this a begin good. on us we that, margins be leaseback tools headwind And finally, had sales was cost that you our we've terrific economically. cost It to anniversary and labor quarter saw looked program anymore. restaurants, did that then a won't successful in have We if

So sale expansion set trying we're for anniversarying XXXX. well up to like monetize the program, to I us leaseback and mentioned, significant going our a QX and in tools investments, margin manage will that our have

Operator

with is Jeffrey Bernstein question line next Our from Barclays. coming of the

Jeffrey Bernstein

in because following giving wondering fourth your to demonstrate much you've would does confidence Just just like quarter of the the would systems, more necessarily confidence? you in Outback up around out around your confidence without in now X% I'm the implied up, fourth color compares seem the It come changes the But for flat Liz, quarter October the just any around sharply comp be your guidance system implies on But with comps. compares start Outback Outback terms difficult comps. brand. intra-quarter you and so what lap and Or that trajectory to quarter, the specifically? fourth think a

Elizabeth Smith

Thanks, Jeff.

continued we reporting don't guidance. reiterate Outback want But to it know, as to strength our confidence you I everything the that relevant the of We Outback. comp have forward relates as So on trends. makes quarter comparison just momentum. fourth give I the less look the in complete year-ago about intra-quarter to

think about -- and performed is think guidance we what perform but Outback I it how feel the has to trends expect prudent, we the I terrific in QX.

Jeffrey Bernstein

just the year comps where decelerated, as and the increasingly maybe Outback, actual and compare trajectory, internal our any great. at especially there's Then but brand, confident below a and seems perhaps color Okay. brands, as expectations, I'm would you're now brand? other wondering the brands pleased well Carrabba's results two trends with It divergence in two like you're consensus seems going trends whether like disappointed the be at of aren't or were the non-Outback trends how to the Bonefish. it each the

Elizabeth Smith

Sure.

the been to kind So multi-journey to XX out base. the the discounting have all other taking months out year in of two brands of three

be feel we will the majority all good then of we headwinds then And reached -- over the The And where end anticipated will pullback portfolio the as traffic really investments brands, by intents from significant lapped year. so that discounting by our monetize over strengthen for the be head have that that those been of we finished the to fact we we will decline discount it able this to about have in the the of we we has put point not and are anticipate and will pulling the out base. of purposes. has the traffic going -- traffic we end to two the year, year, we the it into. last and We the -- certainly

the discounting higher we back. to brand back, of the we traffic it relates because that it coming much declines that's did and As up showing pulled anticipate is a specifically, traffic in quality

Fleming's traffic lot have on out we and the a both in example, record see track on and to a you they're Bonefish, result for of So and healthier ripped profitability. discounting,

pivoted no longer So where and -- we us about a proposition, concerns dining where long feel further are and very at prices. authentic core because, they're road that. affordable further has Carrabba's back which with a been its from brands frankly, good going, away those is longer away for from we Italian

And strategy. down see we strengthening and and business. in such dinners, year, benefits ability Monday, that so portfolio born the patient the the out Discounting actually tactics off-premise the as such us on investing portfolio gives less XX% this and us the we gives Amore wine as are others programs, as finish those strength taking differentiated the as such to our as we're to how it of continue be is

QX. Outback in us the think ability portfolio, on effect with and I the of then all we've to put the the us out, So as the managed discounting the strength we getting has the way exit be others given Outback, behind playbook that'll

a looking enter traffic certainly we're for So more strength as we year. lot next

Operator

Morgan of the with Our comes next question line Stanley. from John Glass

John Glass

that about talked a And context that is? And can close How start for it's maybe your when time at you for the around that onetime And was recur, we of areas incentive in about flattish do maybe won't next Could than margin your U.S. bit to the bit little you've -- a biggest opportunities that there the you P&L so within or what quarter, x enthusiasm gap? to then speak frame I peers. comp, where the are cost? then the kind look that year? you you about this think in restaurant discrete of XXXX, opportunity up still lower margins think

David Deno

Yes. Sure.

food in opportunities costs managing the have labor. We and in restaurant

you our manage closely in costs, QX and to shape, we If look our at overhead. opportunity good continue have to labor really they're

leveraged overhead We that. growth in our very business are getting on being committed and to -- leverage

X thing pretty growth investments things, in And John, and with or see side. but a along So as as same-store the of like will the is, sales me, that's out pretty off sales X margin The us in food we QX, we to behind will mentioned same-store us, significant us leaseback box, see headwind on of was we much expansion anniversarying help economically, result. our and program, labor as we're I well. are -- mentioned, box bit on those a behind a I that excuse will earlier, and sale traffic a are it costs margin, continue we the of on great margin elevate really on the delivery the coming

are And go the and QX, to those same-store be to it's they're Now will our outstanding year will with important. about then events sales expand Liz have the together business business have be The Brazil, happened returning, as brand so forward. all And to finally strong. growth time help we there. of the monetize us. things, and an in talked behind that -- margin things those come us continues very we

John Glass

not discrete -- year it's to was? they is about the enough what this headwinds just your it, recur onetime you just some So anniversarying they're year, that don't that of won't just year, large or not just discrete were a cost this next call XXXX items really unfavorable versus The year point you that this is had follow-up.

David Deno

discrete the the items, And the in the sales is about we John, in margins it's day very, and office very growing next a do year aren't margin business investments home we're as in bullish box. and productivity and it's for on That, QX every work in there result. any -- the restaurants the

Elizabeth Smith

us. year-over-year difficult sales Brazil's into back control and significant XXXX. environment change in feels [Technical certainly That's continuing very XX-plus of years Difficulty] quite had comp this a our that we one no it's of we great it although in performed for good don't well at pretty as growth. a actually point, head sees But that. on but that, store performance, track

Operator

from Our of next comes the question line Ivankoe JPMorgan. John with

John Ivankoe

matured confidence doing by it to as experience want just talk your about update your not it. third-party hoping of secondly, more time and there or just incremental then that expanding talk in this of how get quartiles on seeing some shift be employes maybe big If to overall by sales possible an How how terms cohort you about to that. you're in delivery, We're your it's an going more of more may on delivery I project markets? own with have mean you And versus in happening of forward? in-house

David Deno

believe for to our thrilled that major are John, and off-premise continuing be plus be it opportunity with in total Off-premise We yielding performing. company. will of we is sales. XX%-ish in delivery all, first Right. how into a

expect we times has delivery we right the an and and along. restaurants rolled We at will we and all really now be through happened. the we to everything are delivery additional eligible that, think out We flow continue locations are -- and get year, of XXXX. an that to competed be in that back XXX delivery for as time really half else, And this So rolling with we time and out we we the humming took opportunity absolutely restaurants. that will -- took for XXX had to us that move those

is have business -- it off-premise grew QX. in our We of about double XX% and in now the digits low

pleased us complete happen, together. experience to us It teams really data. make that capability process the business by our that through. flow control the doing is Why When that? us our gives that we is So everything gives we the customer coming And it of the about we're gives that. with in-house adoption It built of and forward. very as go

We omni-channel testing an be will approach.

But team testing pleased we developed are with and adoption operators. are that with the clearly, very we the a our So internal third-party. by

the for company. see just delivery we up, opportunity a opportunity, very to big delivery wrapping in very opportunity a off-premise be big be John, our well, So and continue

Elizabeth Smith

rolling John, for different point, XX%. out see not box XX% to The these that excitement so started to that we're test year these. is validation to have, and would of belief get restaurants or there's market the the We so in in restaurants, an layers this do this add are your only do X thing our the strong. embraced which highest-performing we've kind opportunity I that of delivery being will that our extremely the of much X have that out in a because that we gates out of rolled

about we'd everything this it one, comfort quartile in it's delivery to our hoped restaurant, incremental; absolutely our respects of want the exactly their where provide top many restaurants. is: for going. the certainly home. where that of It customers belief the and many on They two, validation quality So times in enjoy is food,

continue customer roll So that is that the demands where in confidence delivery. to to and given -- us for infrastructure what's operating the hitting we're that the the metrics the what's

Operator

line is question coming Farmer Jeff next Haskett. from the Gordon of Our with

Jeffrey Farmer

couple on Rewards. Dine a Just

that? you to the customers Rewards what those is visit So Have Dine any not? compared frequency ever shared who metrics guys on for are your

Elizabeth Smith

of that competitive for frequency. the out having broken purposes Jeff, certainly positive not levels we funnel. various effect a at It's engagement have

Jeffrey Farmer

And bit sticking little a Rewards, Okay. with topic. Dine different

I think new Rewards XXX,XXX for the Dine mentioned to customers quarter. close you

several rate the over maintaining been quarters. run that to close the you've think I last

do pace? an level optimal long targeting? there think you membership you of Is question is, sort maintain the you're that can how So this

Elizabeth Smith

ratings look program the that at program the we certainly early of app, we believe the as well the at our that loyalty journey. we're believe -- certainly the the because success in attractiveness our and still of you and Well, if of if of loyalty innings look as you the all

data getting program, specific the Rewards We further. now could very that customer and for market to frequency the are profiles customer have and to our developing enhancements drive directly then enables data Dine us which

to Now there's get I further but don't loyalty. ahead, want certainly,

now files a We that facility X.X are efficient much effective monetize loyalty customer way. we more that a in to with and in the have

our be continue to going is a as differentiator this for growth well So lever to as portfolio. significant

Operator

with James. Vaccaro Raymond from the comes question next Brian of Our line

Brian Vaccaro

growth of to a Outback-specific on said that a off-premise, you then quick sales And real comment? follow-up follow-up. I and Just XX% an think Was the margins quick. move But year-on-year. double-digit

David Deno

No.

Elizabeth Smith

No.

Brian Vaccaro

that Outback-specific an Could provided basis? on you

David Deno

but the materially aren't different. don't, We numbers

Brian Vaccaro

basis and by there surprise? you was And on at quarter Was think can item us couple the cost third internally. food had what in commodity understand might about line outlook least drove point caught that increase? higher margins, we A importantly, or maybe expected Okay. should we a particular And help how I just you into QX if more the have XX than could, the 'XX? category that

David Deno

nothing came We most contracts in and particular is of the We part we're and saw a We of little be QX. the QX QX, significant. very fine. good days. timing have crab of We really XX all buys fine. decisions make good just about about The in about for elevated together how going food commodities. various did about those cost QX feel they within some but to on bit some QX feel commodities. year's Yes. was making We're unique XXXX things.

So more the timing guidance, Brian, get together. just -- about fine. how QX contract of good was expect mean, it we and there. fine, XXXX, the is came when more Full we I year's a

Brian Vaccaro

with the And helpful. line. quarter OpEx sticking That's that other third Okay.

So XX see year-on-year there. nice the was ad What pips leverage in or the spend to XX quarter?

David Deno

we typically... That's something

Elizabeth Smith

from a It's dollar basically basically flat was not. standpoint. It

David Deno

seeing you're side And Brian, initiatives good productivity some there, energy well yes. the as and everything on Yes, else.

Brian Vaccaro

on one last the G&A then side. And Okay.

aware in an $XX any year-on-year that there you basis, $X that dollars timing million So Is underlying savings And out. a update XXXX does increase then flat annual G&A on provide your could on shift the reflect despite dollars you line? where? if line? we so, that incentive that of expectation, And Or around underlying kind comp in an million in should of? it be called

David Deno

That spend. to management. here, Yes. an trying a the overhead that last cost benefit tight consider our but we we incentive is reflection especially flat of do year-on-year, the very know year direct We're million $X from had when

want day, to and area, just and instance, our to push better control every in and team that for there working really I job. to fantastic doing our so IT our accounting while the call and forward manage getting team out, hard in we're continuing headquarters cost on else productivity a better they're office. everything and initiatives really And

a it's -- Brain, manage efforts there, in everyday. of we're think I matter that So a the doing to

Brian Vaccaro

On last the for covered me. many quarter? by end one Okay. were of delivery I how then it, third just deliveries, if sorry the missed units at And

Elizabeth Smith

Well, we XXX. had XXX, back the half another over and we've told you rolling that year, of the we're

roll intra-quarter XXX going out. provide will but as back we not we're that So give numbers, we to perspective

by on out very on be seeing, we're delivery bullish to our rolled end XXXX. expect we're fully Based locations the everything of that. We

Brian Vaccaro

is you that 'XX were envision of that many that think include how eligible. on said will How you And that, -- units sort -- -- I units are that? many Okay. sorry, you were these

David Deno

number. give That's a it, XX% provide -- We're Outback Carrabba's kind system-ish of would -- I'm too as be what it's more and guessing. XX%, looking guessing Brian, little that. color I'm definitive through But the to work of early a commentary. at what we'll we're we

Operator

the of line of The Gregory Bank next from America. question comes Francfort with

Gregory Francfort

got questions. I two

just is first housekeeping one. The the

what for on fourth my does something math have was guidance, a the average I the Or tax rate? my just tax that Is on it question positive wrong? just check. mid-teens other And -- rate So is imply quarter? like the

where you keep you X.X-ish something little that as been kind of that time? range? range, an X.X% pricing can delivery? something in bit to much then is from think or the maybe I is power Or sort of over that where do on a is how running And basis? back X% expect this you And of trend underlying that like you've need you have at Do go we it forward? to pair

David Deno

low those don't we'll turn looks Liz the which like. PPA double-digits and over kind area. kind expect of tax timing on exercise the option to I'll kind We of normalized in side. be it on the kind our it what QX, things. Well, forecast of legacy really that's would of rate any But rate, of

Elizabeth Smith

Sure.

keep growth versus in pricing. through back discounting, is right, just seeing our in So pulling you're what flowing mind

always has been X roast pricing want to Fleming's. That's $XX.XX year. around our beef versus the check average if benefiting this XXX So imply legacy X.X%. driving the The pricing. line at We eliminated pulling the that you price to -- in what's that aside is out to kind discounting. and X% of any growth from [Indiscernible] moderately

to relates guidance, more for give on year, open but hasn't next it our changed. As philosophy that we'll pricing

Gregory Francfort

And it. maybe Got then if I'll do follow-up. one

from environment? Just of the the what you biggest gains? this share who are share And in is one drivers maybe of taking

Elizabeth Smith

million As So highly is right? category, a this category. $XX a it's you fragmented know

it. of it from not kind you down. usage, share a concentrated it you as so category, the And to It's pin relates everybody with such and take sources but can

and this we're in think continue aren't good frequency, times we're getting ever are gain across new ability to go. I've look you So take why and And Outback's volumes where are of by we've at from as portfolio, wants more back, seeing layers new that's success we're tightening the to locations now call, that and just it The is because going the we've share. say, -- on why that I that driven with increased to users the you investments to overall our built, and a growing. in continue we're said couple news we others to which confident share consumer than that's monetizing we're the made,

Operator

comes question next of from line Holthouse Sachs. the The Goldman with Karen

Karen Holthouse

actually than accelerated XX% pipeline could we Is And It's or of year? for of sort units then that that overall does And that the for the sort of also an encouraging think as next something into growth? pipeline similarly how what of into relocates. be more on could on outright commentary pretty positive year? framework should new for next be that could there tie unit thoughts be sort

Elizabeth Smith

comment and Sure. I'll then Dave.

time we're XX% can of great XX%. these an average an so we we And that relocate get just fast the as relocating seeing XX%, happen. Outback, are to as We every things pipeline, because

So this when right terrific. estate, brand a the AUVs the real is box in the are given it's

to paces as can. this to pipeline. a because for know, took for doing It competition go faster while supply, us The we're our sites. love A-quality that looking We the is those So given you quickly remodels. category sites, would as source as on that in of we the we're build

can. as do as we So that quickly to we're going

to about also that's relates before we it they're talked be the out going Outback, an to able incremental pace As we're do by those, there. for governed Outbacks, supply see the to and which opportunity also we've that's at XX

restaurants of restaurants, new have competing restaurant a are other A tremendous while basis, hanging sites. for still You amount onto the same

possible. quickly to like front. on those Outbacks opportunity, as Fleming's the I'd an real see a the it's then So a additional as of function We category, we'll but relocate XX And sites. as get

and As for on opened lookout have you been well X last we're Then system always the Fleming's average. terrific our the know, above just so those.

of very relos new about So good love to units. faster. Outback We'd we a opportunity feel and for incremental It's function go supply.

Operator

Guggenheim question coming the with line is next from of Our Matthew DiFrisco Securities.

Matthew DiFrisco

the Is I Just Outback the XX U.S. the the at is a primarily guess to of had shared follow-up all couple brand? the that all Or across that brands? -- in related with evenly questions. composition. the basis points on

David Deno

when is year we the last points spread incentive to basis and nothing XX company. with this do was that Yes, year took across It comps down. has

Matthew DiFrisco

Okay.

the were up you they have said, such I'd record for comp at Fleming's, commentary margins for Outback, margins record the I you're think had obviously, in Bonefish guess you a So strong at to year-over-year. and

purely restaurant-margin then So is to a on in basis, would basis down just a the that year-over-year? it considered be Carrabba's U.S., be on brand

David Deno

we in referencing two brands. we restaurant those see coming. the were guide mentioned, get profit Yes, at I up, by very record QX, strong we performance QX But talking were in in X U.S. profits and brands like brand. about and margin those was don't we But

Matthew DiFrisco

dollars so profit Profit is what you're -- saying?

David Deno

sir. Yes,

Matthew DiFrisco

Okay.

Or that may or saw ways were be -- more stores basis just we -- a for that I still So XXXX? opened levels XQ, guess being the or to margin but you you for to reflects a from in back say away you on if then going back 'XX there? are

David Deno

margin quickly. but basis on in you'll that progress see opportunity granularity got significant the I we're a significant XXX of And we we've guide, going kind expansion Nothing year-on-year. think to and point-ish in make margins on think that

Matthew DiFrisco

out? be where might of be there And those you analysis there base stores? we certain Are of rationalize sort the is overall potentially of independently? they on of many base level are either looked would some -- the subtraction? of how and Or it the or sort underperforming negative there benefit at closing Last Excellent. from is over to Are opportunity flow done cash that that could stores? Carrabba's. by cleaned being amount they Have addition question, some maybe

David Deno

each Yes, all anticipate a don't initiatives. quarter, we will a initiative. and any cash our robust look restaurants, year closures don't of we of at large significant full We we very everything anticipate flow our do Carrabba's and Carrabba's review of brands. But our

Matthew DiFrisco

the in does that brand And or well as the the for there Carrabba's -- term, near the influence problems down the strategy growth Abbraccio? then Brazil does

Elizabeth Smith

the continuing fact think that is in you a back made think thing be feel that comp about mean across of No, for Yes. QX. you feel brands expect that more on about was -- with compelling and good was positive comfortable comps I we've positive should it both pretty should exited of the We then Brazil I the is, I a terrific and event-driven so to us. kind And Brazil case good a track. that investment

performing down there well. Abbraccios XX extremely have We

and There's in that why the about Abbraccio XX runway success the beef significantly of penetrated. under are have to casual no considering reason shouldn't of is enjoy Italians category -- #X Outbacks. dining down beside our the Outbacks We mind there next

the Brazil like about markets, performing. thumbs-up it's think good international feel and a but we call feel how you think for is I can very So never I Abbraccio

Operator

question Zackfia next of William Our Blair. the line is Sharon with from

Sharon Zackfia

and So a delivery, question question on on follow-up also marketing. a then

spend, Carrabba's marketing dynamics and in side, behind restaurants? digital? then break XX% I'm to you are that secondarily, your And -- percent could is On delivery, delivery now the those I the out, won't likely Carrabba's of and Outback what of XX% sorry, in what common guess that Bonefish get

David Deno

continue side, rural-trade we'll trade areas or areas over look a Sure. why Sharon, further, the household at I'll always mainly, We'll find but penetration, opportunity. typically -- I take the range. don't gave that's but is of have That's and on delivery turn it's marketing just which Liz. range, for delivery there fees characteristic. it piece as we're But a to to out that enough

Elizabeth Smith

omni-channel approach. add the other is to that I'd thing we are Yes, only take going an

always customer centric. be want Our we -- to

wants So priority to through get aggregator available, looking we're that. a if customer product, and it's our third-party our our -- delivery a at

market. So to they people go ways that have different

X all spend. marketing break has digital. front, percentage with never ROI building more do it's us data been as you and on What of our that, analytics sales our to is and out because allowed -- things: a what we But and TV the On question. I great we've is effective a get marketing on tell that the will much one, efficient

And our data you So from personalization year. X.X% this into X.X% year, saw last digital we goal X.X% portion -- shifted and big around to one-on-one. we're to have X.X% a last where communicating

investment will identify track to but that and payoff able For and that competitive to purposes, specifics, increasingly is for going made I it IT us. get the say infrastructure to is in into we it to I be what the don't monetize want

Operator

next BMO with Capital Strelzik from Andrew comes The question Markets.

Andrew Strelzik

first question I about you're ask talking you at the remodel want about to The Outback. that is

increased the demand. be than see, might that it's Sounds like more lot look we meet may a feel just normally and shifting to updated

types the your to you're are? where what achieve to about that of talk And maybe looking things you there? you're do. trying can around So priorities specifics Any

Elizabeth Smith

Sure.

prototype number the we So the a seeing which of revenue program, all market, in addresses have remodel one effectively opportunity.

in of rooms wholly becoming. be XX% -- anticipate to-go that our what out are quartile it'll time that We over to we bumping said will reflection will we and what and our incremental. believe be it in XX% top that Remember, we seeing we as a be

kind anywhere not you different those looking our I on of spending to some they in and serve to will of sure interior as to as remodels. look I'm to-go prior want we're that updating out well be entry flow exit to room go. about that from the as on -- capital remodels the the So do remodels know addition that is interior delivery expenditure for and bumping a at

the the that $XXX,XXX range, in of of $XXX,XXX box. kind depending on So size to

adding seeing put that's the to love so in more contemporizing in-house and we're in able more the it's traffic where well. box us seats we'd as and of grow, kind so -- And for probably to flow addition because to interior be the we're difference biggest seats,

Andrew Strelzik

That's is very helpful. on Rewards. question And Dine my other just

Now any segmenting is before do other in different benefit. been the more I I brands Is of prior, Or start you're customers? the at have and files push desire a strategy as your clients, to that that? might know segmentation. you do seen to there of there that you're the have where customer that it's all the really more place mean, to doing looking brands? customers across

Elizabeth Smith

to our I'm mean Well, when you assuming just other across clarify, and you to want brands, push cross I brands. say fertilize --

Andrew Strelzik

they as they the have, of apply those customers might types don't go I see they that to mean, of to types brands, Correct. in other things. you that

Elizabeth Smith

that Yes. that customers year you've lot increased introduce are absolutely increased just we've associated cases seen the as against also when of is well. on brand. with you've seeing customer brand many Fleming's we one that them to of seen frequency a And the associated it's to brand. basis introducing with program, the in is another success that We lift traffic why but And another within two on -- really brand, much so say it's not frequency, it's that

different it's to part another eating that occasions. served benefit really you going seeing be tightly and And a of we're forward plan So this that's have it's of hope. the a cross-fertilization portfolio of well. having working that exactly as I what's as example edited where going think we'd And big

Operator

to like the would for gentlemen, Smith the session, Ladies the turn call reached closing and to remarks. and have end Liz I question-and-answer of we back

Elizabeth Smith

joining all. call, be where more for on much Thanks you everyone, we'll our XXXX portfolio QX updating very look Thanks, as our us about well. to position talk a today. forward to We in on

Operator

you. concludes Thank teleconference. This today's

your time. this You at Thank your you lines for participation. may disconnect

Bloomin' Brands (BLMN) 29 Oct 182018 Q3 Earnings call transcript